Northwestern (NWE) AI Stock Analysis

• Market Cap: $4.27B
• Dividend Yield: 4.09%
• Average Volume (3M): 618.21K
• Price to Earnings (P/E): 23.6
• Beta (1Y): 0.08
• Revenue Growth: 4.90%
• EPS Growth: -4.42%
• Country: US
• Employees: 1,585
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 1.17
• Shares Outstanding: 61,443,623
• 10 Day Avg. Volume: 712,131
• 30 Day Avg. Volume: 618,208
• PEG Ratio: -1.13
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 2.46
• P/FCF Ratio: -30.47
• Enterprise Value/Market Cap: 1.77
• Enterprise Value/Revenue: 4.69
• Enterprise Value/Gross Profit: 7.54
• Enterprise Value/Ebitda: 12.87
• 1Y Price Target: $61.25
• Price Target Upside: -12.27% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 3.81
• Revenue Forecast (FY): $1.69B

• Rating: 64 Neutral
• Price Target: $74.00 ▲(5.99% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is primarily constrained by financial quality, especially persistently negative free cash flow and reliance on external financing, alongside only moderate balance-sheet flexibility. Technicals are supportive (price above major moving averages with positive momentum), and the earnings call was moderately positive on guidance/dividend, but is tempered by regulatory, cash-metric, and execution risks. Valuation is mixed: a solid yield is offset by a relatively high P/E.

Positive Factors

Regulated rate-base utility model

A regulated business model with rate-base recovery and riders gives durable cashflow predictability and legal pathways to recover prudently incurred investments. This structural revenue framework supports long-term capital spending, stable returns and lower commercial cyclicality versus merchant generators.

Merger increases scale and diversification

The announced merger with Black Hills is a structural change that materially expands scale, diversifies service territories and rate base, and targets higher EPS growth and improved credit profile. Larger scale should enable better cost synergies, stronger regulatory negotiating position and improved financing flexibility over the medium term.

Operational control of Colstrip

Gaining majority control of Colstrip materially strengthens resource adequacy and operational control in Montana. That reduces dependence on external market purchases, helps manage generation costs, and supports reliability and affordability—durable advantages for rate-based utilities in constrained regions.

Negative Factors

Persistent negative free cash flow

Capital expenditures consistently outpace operating cash generation, producing multi-year negative free cash flow. That structural cash shortfall forces recurring external financing for capex and dividends, reduces financial flexibility, and raises vulnerability to higher borrowing costs or adverse regulatory timing over the next several quarters.

Elevated and rising leverage

Leverage that exceeds equity and a rising debt trend limit balance-sheet flexibility. Higher absolute debt increases interest expense and sensitivity to rate moves, constrains capacity for incremental investment or equity returns, and could pressure credit metrics as the company executes an expanded capital plan and merger integration.

Regulatory disallowance & under-collections

Regulatory disallowances and under-recovery of supply costs create one-time earnings hits and recurring cash pressure. The Montana disallowance and under-collections materially compressed FFO-to-debt, weakening coverage metrics and making financing and dividend decisions more dependent on successful regulatory adjustments or tariff recoveries.

Northwestern Business Overview & Revenue Model

Company Description

NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and various industrial customers. The company operates through Electric and Natural Gas segments. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,819 miles of electric transmission and 18,177 miles of electric distribution lines with approximately 400 transmission and distribution substations; and 2,166 miles of natural gas transmission and 4,945 miles of natural gas distribution lines with approximately 138 city gate stations in Montana. It also operates 1,308 miles of electric transmission and 2,320 miles of electric distribution lines in South Dakota; and 55 miles of natural gas transmission and 2,517 miles of natural gas distribution lines in South Dakota and Nebraska. The company serves approximately 753,600 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Corporation was incorporated in 1923 and is based in Sioux Falls, South Dakota.

How the Company Makes Money

Northwestern generates revenue predominantly through the sale of electricity and natural gas to its customers. The company operates under regulated utility frameworks, allowing it to earn a return on investments in infrastructure and services. Key revenue streams include residential and commercial energy sales, as well as transportation and distribution fees. Additionally, NWE may engage in long-term power purchase agreements and may benefit from partnerships with renewable energy developers to diversify its energy portfolio. Regulatory decisions and energy demand dynamics also significantly influence its earnings, as they can impact pricing and operational efficiency.

Northwestern Financial Statement Overview

Summary

Income statement is solid with steady revenue growth, but 2025 profitability softened versus 2024. Balance sheet leverage is sector-typical and relatively stable, though debt has trended higher. The main weakness is cash flow: free cash flow is persistently negative and operating cash flow coverage of earnings is weak, increasing reliance on external funding.

Income Statement

Revenue has grown steadily over the last two years (2024 and 2025), with 2025 showing a stronger top-line increase than 2024, following a decline in 2023. Profitability remains solid for a regulated utility, but 2025 earnings softened versus 2024 as net margin stepped down (roughly 11% vs. ~15% prior year). Gross margin is strong, though it has been volatile year-to-year, which suggests underlying cost/recovery dynamics are not perfectly consistent.

Balance Sheet

The balance sheet looks typical for a utility: sizable leverage with debt running a bit above equity (debt-to-equity a little over 1x in 2024–2025), and total debt rising over time. Equity has also grown, helping keep leverage fairly stable. Returns on equity are moderate (mid-to-high single digits), consistent with the sector, but the steadily higher debt load limits flexibility if rates stay higher or capital needs rise.

Cash Flow

Operating cash flow is consistently positive, but free cash flow is negative every year shown, indicating ongoing capital spending needs are outpacing internally generated cash. Cash generation relative to reported earnings is mixed and generally not strong (operating cash flow covers only about half of net income in 2024–2025), and free cash flow remains negative relative to net income, implying continued reliance on external funding (debt/equity) to support investment and shareholder returns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.61B	1.51B	1.42B	1.48B	1.37B
Gross Profit	1.33B	1.29B	781.36M	764.40M	946.77M
EBITDA	587.44M	574.43M	526.15M	477.53M	471.40M
Net Income	181.09M	224.11M	194.13M	183.01M	186.84M
Balance Sheet
Total Assets	8.46B	8.00B	7.60B	7.32B	6.78B
Cash, Cash Equivalents and Short-Term Investments	8.78M	4.28M	9.16M	8.49M	2.82M
Total Debt	3.29B	3.10B	2.79B	2.63B	2.56B
Total Liabilities	5.57B	5.14B	4.82B	4.65B	4.44B
Stockholders Equity	2.89B	2.86B	2.79B	2.67B	2.34B
Cash Flow
Free Cash Flow	-130.00M	-142.50M	-77.66M	-207.90M	-214.35M
Operating Cash Flow	394.45M	406.74M	489.23M	307.24M	219.98M
Investing Cash Flow	-570.63M	-554.46M	-570.81M	-516.86M	-435.83M
Financing Cash Flow	177.90M	151.55M	84.31M	213.32M	217.52M

Northwestern Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 69.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWE, the sentiment is Positive. The current price of 69.82 is above the 20-day moving average (MA) of 68.76, above the 50-day MA of 67.06, and above the 200-day MA of 59.12, indicating a bullish trend. The MACD of 0.66 indicates Negative momentum. The RSI at 60.34 is Neutral, neither overbought nor oversold. The STOCH value of 54.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NWE.

Northwestern Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OTTR	72 Outperform	$3.61B	13.15	16.10%	2.54%	-3.18%	-8.62%
MGEE	66 Neutral	$3.02B	22.22	10.80%	2.36%	8.26%	12.47%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
NWE	64 Neutral	$4.27B	23.59	―	4.09%	4.90%	-4.42%
BKH	64 Neutral	$5.56B	18.51	7.96%	3.91%	7.03%	6.64%
AVA	60 Neutral	$3.47B	18.13	7.28%	5.10%	2.14%	-6.51%

Northwestern Corporate Events

NorthWestern Adopts 2026 Short- and Long-Term Incentive Plans

On February 11, 2026, NorthWestern Energy’s board approved a 2026 Annual Incentive Plan covering officers and eligible non-represented employees for the performance period from January 1 to December 31, 2026, with payouts due by March 15, 2027. The plan ties short-term bonuses to a mix of individual performance and company-wide metrics, including net income adjusted to exclude merger costs with Black Hills Corporation, safety, reliability of electric and gas systems and customer satisfaction, with executive targets set as high as 100% of base salary for CEO Brian Bird.

The board also approved a 2026 Long-Term Incentive Program on February 11, 2026, granting restricted share units to about 80 participants, including all executive officers, with targets up to 325% of base salary for the CEO and vesting over three years. These equity awards are designed to retain leadership and align them with shareholders as the company pursues a pending merger, with specific provisions to convert vested units into shares of the merged company and to protect participants in the event of a change in control or involuntary termination following the merger.

The most recent analyst rating on (NWE) stock is a Buy with a $76.00 price target. To see the full list of analyst forecasts on Northwestern stock, see the NWE Stock Forecast page.

NorthWestern Updates 2025 Results, Guidance and Dividend Strategy

NorthWestern Energy reported 2025 net income of $181.1 million, or $2.94 per diluted share, down from $224.1 million and $3.65 per share in 2024, largely due to higher operating expenses and a regulatory disallowance tied to Yellowstone County Generating Station capital costs, partially offset by higher rates and transmission and gas revenues. On an adjusted non-GAAP basis, 2025 earnings rose to $220.1 million, or $3.58 per share, from $208.9 million and $3.40 per share in 2024.

For the fourth quarter of 2025, net income fell to $44.7 million, or $0.72 per diluted share, from $80.6 million, or $1.31 per share, as cost pressures and non-cash charges weighed on results, while adjusted EPS improved modestly to $1.17 from $1.13. The company’s board increased the quarterly dividend by 1.5% to $0.67 per share, payable March 31, 2026, signaling continued commitment to shareholder returns within a targeted 60–70% payout ratio.

Strategically, 2025 was described as transformational, highlighted by completion of the Energy West acquisition, adding about 33,000 natural gas customers, and the December 2025 conclusion of Montana electric and natural gas rate reviews, which approved settlements including deferral and recovery of wildfire mitigation and insurance costs. NorthWestern also closed on the acquisition of Avista and Puget Colstrip interests on January 1, 2026, bolstering resource adequacy and supporting service reliability and affordability for Montana customers.

The company advanced its planned all-stock merger of equals with Black Hills Corporation under an agreement signed August 18, 2025, with regulatory applications filed in Montana, South Dakota, Nebraska, and at FERC, and shareholder votes scheduled for April 2, 2026. The combined parent company is slated to be named Bright Horizon Energy, with merger-related costs of $9.3 million recorded in 2025 and closing anticipated in the second half of 2026, pending approvals and other conditions.

Looking ahead, NorthWestern initiated 2026 non-GAAP earnings guidance of $3.68 to $3.83 per diluted share and reaffirmed a 4% to 6% long-term EPS growth target from a 2024 adjusted EPS base of $3.40. It also unveiled a $3.2 billion capital plan for 2026–2030, up 17% from the prior plan, aimed at supporting 4% to 6% annual rate base growth and funded through operating cash flow, debt, rate increases, and, starting in 2027, equity issuances tied to South Dakota generation investments.

Regulatory developments in Montana included a December 2025 final order from the state commission approving natural gas and partial electric settlements from a 2024 rate review filing, which set returns on equity for electric and gas operations and endorsed a Wildfire Mitigation Balancing Account for recovery of incremental wildfire-related costs. These outcomes, combined with new assets and pending merger synergies, are expected to shape NorthWestern’s earnings profile, capital structure, and risk management as it navigates higher costs and expanding infrastructure needs in its core service regions.

The most recent analyst rating on (NWE) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Northwestern stock, see the NWE Stock Forecast page.

NorthWestern Energy Attends Wells Fargo Symposium

On December 9, 2025, NorthWestern Energy executives attended the Wells Fargo Energy and Power Symposium in New York to engage with investors and reaffirm their adjusted 2025 non-GAAP earnings guidance. The company also highlighted recent achievements, including regulatory approvals for a wildfire mitigation plan and a merger agreement with Black Hills Corporation. NorthWestern Energy’s strategic focus includes a $2.74 billion capital investment plan over the next five years, aimed at driving earnings and rate base growth, while maintaining a commitment to consistent dividend growth.

The most recent analyst rating on (NWE) stock is a Buy with a $73.00 price target. To see the full list of analyst forecasts on Northwestern stock, see the NWE Stock Forecast page.